Trouble looming again for Texas tourism industry
After coronavirus stole spring, businesses fighting to survive through summer
It was bluebonnet season. The best time to invite friends and family to visit. The temperature was just right for outdoor porches at Hill Country wineries, hikes at Big Bend National Park or strolls along the River Walk in San Antonio.
The coronavirus pandemic, however, robbed Texas of its spring tourism season and now threatens to steal summer, too. From Port Aransas to Galveston to Fredericksburg, already shaky travel and tourism businesses staggered through what may be the worst Fourth of July weekend ever — one marked by the shutdown of beaches, bars and Big Bend National Park.
“It feels like death by 1,000 slices,” said Johnny Smecca, president of the Galveston Restaurant Group, which operates several popular restaurants on the island, including Little Daddy’s Gumbo Bar and Mario’s Seawall. “We’re living day to day, and I don’t know how to operate day to day. Every single day we have to reinvent ourselves.”
The recent surge in COVID-19 cases and new business shutdown orders are pummeling a tourism industry that brings more money into the state from outside than any other sector except energy. Hotels, theme parks, bars and restaurants have had to endure a
painful, if not fatal, whiplash of closings, brief reopenings and now reclosings.
The situation may only get worse for hospitality businesses, which rely on a positive perception of Texas. To the horror of local tourism agencies, the headlines dominating the national conversation portray alarming spread of the novel coronavirus throughout the state.
The travel recommendation this summer: Avoid Texas. And to Texans: Stay home
Home for holiday
Losing both the spring and summer seasons, which together account for about 60 percent of annual tourism revenues, is a blow not only to the industry but also to a state economy hammered doubly hard by a historic oil crash and pandemic. Tourism is an $80 billion a year industry that generates nearly twice as much in economic activity as visitor spending filters through the economy, supporting local businesses and jobs.
Even with a rebound in May, when Gov. Greg Abbott allowed businesses to reopen at reduced capacities, leisure and hospitality business have slashed more than 370,000 jobs from a year earlier, according to the Labor Department. Restaurant jobs plummeted nearly 25 percent from May 2019; hotel employment dropped by more than 30 percent.
State collections of hotel occupancy taxes have plummeted, too, revealing the desperate financial positions of hotels. In April, hotel occupancy tax revenues plunged 63 percent from a year earlier; by May, the year-over-year decline accelerated to 86 percent.
Smecca, the Galveston restaurateur, said he accepted the government-ordered closings in March and April, understanding that it was better for Texas and his business to get the pandemic under control. He was forced to furlough most of his 250 workers as revenues dropped more than 60 percent, but he figured he still had the island’s two biggest months, June and July, to recover his losses and bring back workers. Now, he worries he’ll lose July. “You make all your money in eight weeks,” he said. “I needed June and July. We all do.”
That’s true for many businesses along the Gulf Coast. Amy Watson, general manager of Boathouse Bar and Grill, a sports bar and restaurant on Padre Island in Corpus Christi, was counting on the Fourth of July weekend. She booked live music and planned to open the patio.
When she learned that local officials restricted vehicle access to the beach to discourage crowds, she canceled.
“We count on our money in the summer to get us through the winter,” Watson said. “This is really going to hurt us. It’s been a roller coaster.”
More than 200 miles north, wineries in the Hill Country had pinned their hopes on a summer rebound after many had to shut tasting rooms, which can generate as much as 90 percent of sales, during their peak spring season. But after reopening for just a little over a month, Abbott shut down the tasting rooms again.
Andrew Sides, owner of Lost Draw Cellars, a Fredericksburg winery, said the latest shutdown is not only putting wineries at risk, but also the vineyards that sell the grapes.
Harvest is fast approaching, and some wineries may hold off buying grapes until it becomes clear when tasting rooms might reopen and visitors can return.
Sides estimated revenues fell 40 percent when his tasting room was closed from March to early May. He turned to deliveries, curbside pickup and virtual tastings to keep selling wine and plans to do so again.
“We’re going to fight like hell to make it work,” he said.
Without a paddle
Memorial Day weekend usually heralds the unofficial kickoff of Texas’ tubing season, taking a procession of people through the Hill Country to float along the Comal, San Marcos and Guadalupe rivers. It’s an escape from the oppressive heat.
Tubing outfitters missed their early season from the spring coronavirus-related shutdowns, but many believed they would rebound in the summer. After Texas Tubes in New Braunfels reopened in May, each week became busier and busier, owner Colie Reno said.
But then, Abbott shut them down again. “This is worse because this is busy season,” Reno said.
About 400 miles southwest of New Braunfels, businesses that rely on visitors to Big Bend National Park also are staggering from the one-two punch of spring, then summer, shutdowns.
After a resident in a park community tested positive for COVID-19, the national park was ordered closed on Thursday, just a month after reopening.
Bill Ivey, who owns much of the Terlingua ghost town, including the Big Bend Holiday Hotel and Starlight Theatre, said he was forced to lay off nearly 50 of his 56 employees when hotels in the area were ordered to close in March and Big Bend National Park shut down from early April to June.
“We went from the very busiest season, record sales, to zero,” he said.
Ivey, who had begun to rehire workers, said he was pleasantly surprised by the trickle of visitors in the weeks heading into the Fourth of July weekend, typically the region’s “last hurrah” before the summer heat keeps people away. But those hopes were dashed when Big Bend National Park shut down again.
“It feels like you’re a dartboard,” said Ivey, whose phone began ringing Wednesday night with customers canceling reservations. “When (Big Bend) is closed, it deeply affects every business. It is the main attraction.”
City tourism slammed
In San Antonio, home of the Alamo, the River Walk and the Six Flags Fiesta Texas theme park, tourism and hospitality represents the city’s third-biggest economic generator. But business is a small fraction of a usual summer, said David Strainge, who estimated revenues are down 85 percent at his tour bus company, City Sightseeing San Antonio.
“It’s nowhere near what it would normally be in the middle of June,” Strainge said.
In Houston, the hospitality industry has been hammered by the cancellation of conventions and major events, including the Offshore Technology Conference, an energy trade show that attracts some 60,000 people and generates tens of millions of dollars in spending.
The losses are so deep that Houston First Corp., a public-private partnership that markets the city to convention planners, said last week it would furlough more than half its approximately 200 employees. The Hilton Americas, a city-operated hotel connected to the George R. Brown Convention Center, furloughed 550 of 620 employees.
Occupancy rates at the downtown hotel are in the single digits, where they’re expected to remain through the summer.
Meanwhile, the convention planners that place events in Houston, San Antonio and other cities are suffering, too. Dayne Sullivan, a partner at Adventures in San Antonio, a meeting planning company, said for weeks in early spring he “didn’t want to get up and check emails.”
He knew it would be more of the same: canceled meetings.
Uncertain future
Revenue from hotel occupancy taxes could take more than five years to return to pre-pandemic levels in San Antonio, economists Jon Hockenyos and Steve Nivin told the City Council in mid-June. More than 1,700 businesses that closed during the pandemic — including 910 restaurants, retailers and other hospitality enterprises — probably won’t reopen, the economists said.
“The pandemic’s just not going away,” said Nivin, who teaches at St. Mary’s University in San Antonio. “It’s going to take time for consumer confidence to come back.”
Business travel may never return to pre-pandemic levels said Jason Draper, an associate professor at the University of Houston and an expert in event planning. As companies become comfortable with video conferencing and livestreamed events, they may just keep employees at home — or send far fewer to conventions and conferences.
One thing is certain: Unpredictable closures and openings are bad for business. Cabin fever brought a trickle of customers to downtown San Antonio for bus tours with Strainge. But that trickle has dried up with the new surge in coronavirus cases.
“We had the green shoots of a recovery,” Strainge said. “It’s been trampled all over again.”